CVR Energy, Inc. (“CVR Energy” or the “Company”) (NYSE: CVI) today
announced net income attributable to CVR Energy stockholders of $82
million, or $0.81 per diluted share, on net sales of $1.9 billion
for the first quarter of 2024, compared to net income attributable
to CVR Energy stockholders of $195 million, or $1.94 per diluted
share, on net sales of $2.3 billion for the first quarter of 2023.
Adjusted earnings for the first quarter of 2024 was 4 cents
per diluted share compared to adjusted earnings of $1.44 per
diluted share in the first quarter of 2023. Net income for the
first quarter of 2024 was $90 million, compared to net income of
$259 million in the first quarter of 2023. First quarter 2024
EBITDA was $203 million, compared to first quarter 2023 EBITDA of
$401 million. Adjusted EBITDA for the first quarter of 2024 was $99
million, compared to Adjusted EBITDA of $334 million in the first
quarter of 2023.
“CVR Energy achieved solid results for the 2024
first quarter driven by lower RINs’ expense and higher crude oil
and refined product prices, offset by lower refining margins and
reduced throughput related to the Wynnewood refinery’s planned
turnaround,” said Dave Lamp, CVR Energy’s Chief Executive Officer.
“CVR Energy also was pleased to announce a regular first quarter
2024 cash dividend of 50 cents per share, part of our peer-leading
annualized dividend yield of approximately six percent.
“CVR Partners posted solid operating results for
the first quarter of 2024 driven by higher ammonia sales volumes
attributable to favorable weather conditions, steady nitrogen
fertilizer demand for the spring pre-planting season and improved
nitrogen fertilizer pricing,” Lamp said. “CVR Partners also was
pleased to declare a first quarter 2024 cash distribution of $1.92
per common unit.”
Petroleum
The Petroleum Segment reported first quarter
2024 operating income of $118 million on net sales of $1.7 billion
compared to operating income of $237 million on net sales of $2.0
billion in the first quarter of 2023.
First quarter 2024 combined total throughput was
approximately 196,000 bpd compared to approximately 196,000 bpd of
combined total throughput for the first quarter of 2023.
Refining margin was $290 million, or $16.29 per
total throughput barrel, in the first quarter of 2024 compared to
$411 million, or $23.24 per total throughput barrel, during the
same period in 2023. The primary factors contributing to the $121
million decrease in refining margin were:
- A decrease in the Group 3 2-1-1
crack spread of $14.61 per barrel, driven by a tightening of
gasoline and distillate crack spreads primarily due to increased
inventory levels and lower demand in the current year; and
- Unfavorable derivative impacts of
$57 million from losses on open crack spread swap positions in
the current period compared to gains in the first quarter of
2023.
Factors partially offsetting the decrease in
refining margin were:
- A decline in Renewable Fuel
Standard (“RFS”) related expense of $85 million, which includes a
reduction in renewable identification number (“RIN”) revaluation
impact of $35 million; and
- Favorable inventory valuation
impacts of $37 million for the three months ended March 31, 2024,
compared to unfavorable inventory valuation impacts of
$12 million for the three months ended March 31, 2023,
primarily due to rising crude oil prices in the current period
compared to falling crude oil prices in the first quarter of
2023.
Nitrogen Fertilizer
The Nitrogen Fertilizer Segment reported
operating income of $20 million on net sales of $128 million for
the first quarter of 2024 compared to operating income of $109
million on net sales of $226 million for the first quarter of
2023.
CVR Partners, LP’s (“CVR Partners”) fertilizer
facilities produced a combined 193,000 tons of ammonia during the
first quarter of 2024, of which 60,000 net tons were available for
sale while the rest was upgraded to other fertilizer products,
including 305,000 tons of urea ammonia nitrate (“UAN”). During the
first quarter 2023, the fertilizer facilities produced a combined
224,000 tons of ammonia, of which 62,000 net tons were available
for sale while the remainder was upgraded to other fertilizer
products, including 366,000 tons of UAN. These decreases were due
to the 14-day planned downtime at the Coffeyville fertilizer
facility in the current period.
First quarter 2024 average realized gate prices
for UAN showed a reduction over the prior year, down 42 percent to
$267 per ton, and ammonia was down 41 percent over the prior year
to $528 per ton. Average realized gate prices for UAN and
ammonia were $457 and $888 per ton, respectively, for the first
quarter of 2023.
Corporate and Other
The Company reported an income tax expense of
$17 million, or 15.9 percent of income before income taxes, for the
three months ended March 31, 2024, as compared to an income tax
expense of $56 million, or 17.8 percent of income before income
taxes, for the three months ended March 31, 2023. The decrease in
income tax expense was primarily due to changes in pretax earnings,
while the decrease in effective tax rate was primarily due to
changes in pretax earnings attributable to noncontrolling interest
and the impact of federal and state tax credits and incentives in
relation to overall pretax earnings.
The renewable diesel unit at the Wynnewood
refinery had total vegetable oil throughputs for the first quarter
of 2024 of approximately 6.9 million gallons, down from 22.4
million gallons in the first quarter of 2023. The decrease was
primarily due to a catalyst change at the renewable diesel unit
during the first quarter of 2024.
Cash, Debt and Dividend
Consolidated cash and cash equivalents were $644
million at March 31, 2024, an increase of $63 million from December
31, 2023. Consolidated total debt and finance lease obligations
were $1.6 billion at March 31, 2024, including $547 million held by
the Nitrogen Fertilizer Segment.
CVR Energy announced a first quarter 2024 cash
dividend of 50 cents per share. The quarterly dividend, as declared
by CVR Energy’s Board of Directors, will be paid on May 20,
2024, to stockholders of record as of May 13, 2024.
Today, CVR Partners announced that the Board of
Directors of its general partner declared a first quarter 2024 cash
distribution of $1.92 per common unit, which will be paid on
May 20, 2024, to common unitholders of record as of
May 13, 2024.
First Quarter
2024 Earnings Conference Call
CVR Energy previously announced that it will
host its first quarter 2024 Earnings Conference Call on Tuesday,
April 30, at 1 p.m. Eastern. The Earnings Conference Call may
also include discussion of Company developments, forward-looking
information and other material information about business and
financial matters.
The first quarter 2024 Earnings Conference Call
will be webcast live and can be accessed on the Investor Relations
section of CVR Energy’s website at www.CVREnergy.com. For investors
or analysts who want to participate during the call, the dial-in
number is (877) 407-8291. The webcast will be archived and
available for 14 days at
https://edge.media-server.com/mmc/p/uzouxcj2. A repeat of the call
also can be accessed for 14 days by dialing (877) 660-6853,
conference ID 13745530.
Forward-Looking StatementsThis
news release may contain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
Statements concerning current estimates, expectations and
projections about future results, performance, prospects,
opportunities, plans, actions and events and other statements,
concerns, or matters that are not historical facts are
“forward-looking statements,” as that term is defined under the
federal securities laws. These forward-looking statements include,
but are not limited to, statements regarding future: continued safe
and reliable operations; drivers of our results; income, sales and
earnings per share; EBITDA and Adjusted EBITDA; RINs expense; asset
utilization, capture, production volume, product yield and crude
oil gathering rates; cash flow generation; production; operating
income and net sales; throughput, including the impact of
turnarounds thereon; refining margin, including contributors
thereto; impact of costs to comply with the RFS and revaluation of
our RFS liability; crude oil and refined product pricing impacts on
inventory valuation; dividend yield, including our performance
versus peers; derivative gains and losses and the drivers thereof;
crack spreads, including the drivers thereof; demand trends; RIN
generation levels; ethanol and biodiesel blending activities;
inventory levels; benefits of our corporate transformation to
segregate our renewables business; access to capital and new
partnerships; RIN pricing, including its impact on performance and
the Company’s ability to offset the impact thereof; disruptions to
operations, including impacts on results; carbon capture and
decarbonization initiatives; ammonia and UAN pricing; global
fertilizer industry conditions; grain prices; crop inventory
levels; crop and planting levels; demand for refined products;
economic downturns and demand destruction; production rates;
production levels and utilization at our nitrogen fertilizer
facilities; nitrogen fertilizer sales volumes, including factors
driving same; ability to and levels to which we upgrade ammonia to
other fertilizer products, including UAN; income tax expense,
including the drivers thereof; changes to pretax earnings and our
effective tax rate; the availability of tax credits and incentives;
production rates and operations capabilities of our renewable
diesel unit, including the ability to return to hydrocarbon
service; renewable feedstock throughput; purchases under share or
unit repurchase programs (if any), or the termination thereof;
reduction of outstanding debt, including through the redemption of
outstanding notes; cash and cash equivalent levels; dividends and
distributions, including the timing, payment and amount (if any)
thereof; direct operating expenses, capital expenditures,
depreciation and amortization and turnaround expense; cash
reserves; timing of turnarounds; impacts of any pandemic; labor
supply shortages, difficulties, disputes or strikes, including the
impact thereof; the April 2024 fire at the Wynnewood Refinery
including the impact thereof on our operations, financial position
or otherwise; and other matters. You can generally identify
forward-looking statements by our use of forward-looking
terminology such as “outlook,” “anticipate,” “believe,” “continue,”
“could,” “estimate,” “expect,” “explore,” “evaluate,” “intend,”
“may,” “might,” “plan,” “potential,” “predict,” “seek,” “should,”
or “will,” or the negative thereof or other variations thereon or
comparable terminology. These forward-looking statements are only
predictions and involve known and unknown risks and uncertainties,
many of which are beyond our control. Investors are cautioned that
various factors may affect these forward-looking statements,
including (among others) the health and economic effects of any
pandemic, demand for fossil fuels and price volatility of crude
oil, other feedstocks and refined products; the ability of Company
to pay cash dividends and of CVR Partners to make cash
distributions; potential operating hazards, including the impacts
of fires at our facilities; costs of compliance with existing or
new laws and regulations and potential liabilities arising
therefrom; impacts of the planting season on CVR Partners; our
controlling shareholder’s intention regarding ownership of our
common stock and potential strategic transactions involving us or
CVR Partners; general economic and business conditions; political
disturbances, geopolitical instability and tensions; impacts of
plant outages and weather conditions and events; and other risks.
For additional discussion of risk factors which may affect our
results, please see the risk factors and other disclosures included
in our most recent Annual Report on Form 10-K, any subsequently
filed Quarterly Reports on Form 10-Q and our other Securities and
Exchange Commission (“SEC”) filings. These and other risks may
cause our actual results, performance or achievements to differ
materially from any future results, performance or achievements
expressed or implied by these forward-looking statements. Given
these risks and uncertainties, you are cautioned not to place undue
reliance on such forward-looking statements. The forward-looking
statements included in this news release are made only as of the
date hereof. CVR Energy disclaims any intention or obligation to
update publicly or revise any forward-looking statements, whether
as a result of new information, future events or otherwise, except
to the extent required by law.
About CVR Energy, Inc.
Headquartered in Sugar Land, Texas, CVR Energy
is a diversified holding company primarily engaged in the
renewables, petroleum refining and marketing business as well as in
the nitrogen fertilizer manufacturing business through its interest
in CVR Partners. CVR Energy subsidiaries serve as the general
partner and own 37 percent of the common units of CVR Partners.
Investors and others should note that CVR Energy
may announce material information using SEC filings, press
releases, public conference calls, webcasts and the Investor
Relations page of its website. CVR Energy may use these channels to
distribute material information about the Company and to
communicate important information about the Company, corporate
initiatives and other matters. Information that CVR Energy posts on
its website could be deemed material; therefore, CVR Energy
encourages investors, the media, its customers, business partners
and others interested in the Company to review the information
posted on its website.
For further information, please contact:
Investor RelationsRichard
RobertsCVR Energy, Inc.(281)
207-3205InvestorRelations@CVREnergy.com
Media RelationsBrandee
StephensCVR Energy, Inc. (281)
207-3516MediaRelations@CVREnergy.com
Non-GAAP Measures
Our management uses certain non-GAAP performance
measures, and reconciliations to those measures, to evaluate
current and past performance and prospects for the future to
supplement our financial information presented in accordance with
accounting principles generally accepted in the United States
(“GAAP”). These non-GAAP financial measures are important factors
in assessing our operating results and profitability and include
the performance and liquidity measures defined below.
The following are non-GAAP measures we present
for the periods ended March 31, 2024 and 2023:
EBITDA - Consolidated net income (loss) before
(i) interest expense, net, (ii) income tax expense (benefit) and
(iii) depreciation and amortization expense.
Petroleum EBITDA and Nitrogen Fertilizer EBITDA
- Segment net income (loss) before segment (i) interest expense,
net, (ii) income tax expense (benefit), and (iii) depreciation and
amortization.
Refining Margin - The difference between our
Petroleum Segment net sales and cost of materials and other.
Refining Margin, adjusted for Inventory
Valuation Impacts - Refining Margin adjusted to exclude the impact
of current period market price and volume fluctuations on crude oil
and refined product inventories purchased in prior periods and
lower of cost or net realizable value adjustments, if applicable.
We record our commodity inventories on the first-in-first-out
basis. As a result, significant current period fluctuations in
market prices and the volumes we hold in inventory can have
favorable or unfavorable impacts on our refining margins as
compared to similar metrics used by other publicly traded companies
in the refining industry.
Refining Margin and Refining Margin adjusted for
Inventory Valuation Impacts, per Throughput Barrel - Refining
Margin and Refining Margin adjusted for Inventory Valuation Impacts
divided by the total throughput barrels during the period, which is
calculated as total throughput barrels per day times the number of
days in the period.
Direct Operating Expenses per Throughput Barrel
- Direct operating expenses for our Petroleum Segment divided by
total throughput barrels for the period, which is calculated as
total throughput barrels per day times the number of days in the
period.
Adjusted EBITDA, Petroleum Adjusted EBITDA and
Nitrogen Fertilizer Adjusted EBITDA - EBITDA, Petroleum EBITDA and
Nitrogen Fertilizer EBITDA adjusted for certain significant
non-cash items and items that management believes are not
attributable to or indicative of our on-going operations or that
may obscure our underlying results and trends.
Adjusted Earnings (Loss) per Share - Earnings
(loss) per share adjusted for certain significant non-cash items
and items that management believes are not attributable to or
indicative of our on-going operations or that may obscure our
underlying results and trends.
Free Cash Flow - Net cash provided by (used in)
operating activities less capital expenditures and capitalized
turnaround expenditures.
We present these measures because we believe
they may help investors, analysts, lenders and ratings agencies
analyze our results of operations and liquidity in conjunction with
our U.S. GAAP results, including but not limited to our operating
performance as compared to other publicly traded companies in the
refining and fertilizer industries, without regard to historical
cost basis or financing methods and our ability to incur and
service debt and fund capital expenditures. Non-GAAP measures have
important limitations as analytical tools, because they exclude
some, but not all, items that affect net earnings and operating
income. These measures should not be considered substitutes for
their most directly comparable U.S. GAAP financial measures. See
“Non-GAAP Reconciliations” included herein for reconciliation of
these amounts. Due to rounding, numbers presented within this
section may not add or equal to numbers or totals presented
elsewhere within this document.
Factors Affecting Comparability of Our
Financial Results
Petroleum Segment
Our results of operations for the periods
presented may not be comparable with prior periods or to our
results of operations in the future due to capitalized expenditures
as part of planned turnarounds. Total capitalized expenditures were
$39 million and $40 million during the three months ended March 31,
2024 and 2023, respectively. The next planned turnaround is
currently scheduled to take place in 2025 at the Coffeyville
refinery.
|
CVR Energy, Inc. (all information in this release
is unaudited) |
| |
|
Consolidated Statement of Operations Data |
| |
| |
Three Months EndedMarch 31, |
|
(in millions, except per share data) |
|
2024 |
|
|
|
2023 |
|
| Net sales |
$ |
1,863 |
|
|
$ |
2,286 |
|
| Operating costs and
expenses: |
|
|
|
|
Cost of materials and other |
|
1,463 |
|
|
|
1,680 |
|
|
Direct operating expenses (exclusive of depreciation and
amortization) |
|
164 |
|
|
|
169 |
|
|
Depreciation and amortization |
|
75 |
|
|
|
66 |
|
|
Cost of sales |
|
1,702 |
|
|
|
1,915 |
|
| Selling, general and
administrative expenses (exclusive of depreciation and
amortization) |
|
36 |
|
|
|
39 |
|
| Depreciation and
amortization |
|
1 |
|
|
|
2 |
|
| Loss on asset disposal |
|
1 |
|
|
|
— |
|
|
Operating income |
|
123 |
|
|
|
330 |
|
| Other (expense) income: |
|
|
|
|
Interest expense, net |
|
(20 |
) |
|
|
(18 |
) |
|
Other income, net |
|
4 |
|
|
|
3 |
|
|
Income before income tax expense |
|
107 |
|
|
|
315 |
|
| Income tax expense |
|
17 |
|
|
|
56 |
|
|
Net income |
|
90 |
|
|
|
259 |
|
| Less: Net income attributable
to noncontrolling interest |
|
8 |
|
|
|
64 |
|
|
Net income attributable to CVR Energy
stockholders |
$ |
82 |
|
|
$ |
195 |
|
| |
|
|
|
|
Basic and diluted earnings per share |
$ |
0.81 |
|
|
$ |
1.94 |
|
|
Dividends declared per share |
$ |
0.50 |
|
|
$ |
0.50 |
|
| |
|
|
|
| Adjusted earnings per
share |
$ |
0.04 |
|
|
$ |
1.44 |
|
| EBITDA* |
$ |
203 |
|
|
$ |
401 |
|
| Adjusted EBITDA * |
$ |
99 |
|
|
$ |
334 |
|
| |
|
|
|
| Weighted-average common shares
outstanding - basic and diluted |
|
100.5 |
|
|
|
100.5 |
|
| |
|
|
|
|
|
|
|
|
|
| * See “Non-GAAP
Reconciliations” section below. |
| |
Selected Balance Sheet Data
| (in millions) |
March 31, 2024 |
|
December 31, 2023 |
|
Cash and cash equivalents |
$ |
644 |
|
$ |
581 |
|
|
Working capital |
|
512 |
|
|
497 |
|
|
Total assets |
|
4,093 |
|
|
4,707 |
|
|
Total debt and finance lease obligations, including current
portion |
|
1,585 |
|
|
2,185 |
|
|
Total liabilities |
|
3,026 |
|
|
3,669 |
|
|
Total CVR stockholders’ equity |
|
879 |
|
|
847 |
|
|
|
|
|
|
|
|
|
Selected Cash Flow Data
| |
Three Months EndedMarch 31, |
|
(in millions) |
|
2024 |
|
|
|
2023 |
|
| Net cash (used in) provided
by: |
|
|
|
|
Operating activities |
$ |
177 |
|
|
$ |
247 |
|
|
Investing activities |
|
(55 |
) |
|
|
(34 |
) |
|
Financing activities |
|
(664 |
) |
|
|
(122 |
) |
|
Net (decrease) increase in cash, cash equivalents, and
restricted cash |
$ |
(542 |
) |
|
$ |
91 |
|
| |
|
|
|
| Free cash flow* |
$ |
121 |
|
|
$ |
213 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| * See “Non-GAAP
Reconciliations” section below. |
| |
Selected Segment Data
| |
Three Months Ended March 31, 2024 |
| (in millions) |
Petroleum |
|
Nitrogen Fertilizer |
|
Consolidated |
|
Net sales |
$ |
1,722 |
|
$ |
128 |
|
$ |
1,863 |
|
| Operating income |
|
118 |
|
|
20 |
|
|
123 |
|
| Net income |
|
127 |
|
|
13 |
|
|
90 |
|
| EBITDA* |
|
171 |
|
|
40 |
|
|
203 |
|
| |
|
|
|
|
|
| Capital expenditures (1) |
|
|
|
|
|
|
Maintenance capital expenditures |
$ |
22 |
|
$ |
5 |
|
$ |
30 |
|
|
Growth capital expenditures |
|
14 |
|
|
— |
|
|
21 |
|
|
Total capital expenditures |
$ |
36 |
|
$ |
5 |
|
$ |
51 |
|
| |
Three Months Ended March 31, 2023 |
| (in millions) |
Petroleum |
|
Nitrogen Fertilizer |
|
Consolidated |
|
Net sales |
$ |
1,993 |
|
$ |
226 |
|
$ |
2,286 |
|
| Operating income |
|
237 |
|
|
109 |
|
|
330 |
|
| Net income |
|
259 |
|
|
102 |
|
|
259 |
|
| EBITDA* |
|
285 |
|
|
124 |
|
|
401 |
|
| |
|
|
|
|
|
| Capital expenditures (1) |
|
|
|
|
|
|
Maintenance capital expenditures |
$ |
36 |
|
$ |
4 |
|
$ |
41 |
|
|
Growth capital expenditures |
|
6 |
|
|
— |
|
|
18 |
|
|
Total capital expenditures |
$ |
42 |
|
$ |
4 |
|
$ |
59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| * See “Non-GAAP
Reconciliations” section below. |
| (1) Capital
expenditures are shown exclusive of capitalized turnaround
expenditures. |
| |
Selected Balance Sheet Data
| |
March 31, 2024 |
|
December 31, 2023 |
| (in millions) |
Petroleum |
|
Nitrogen Fertilizer |
|
Consolidated |
|
Petroleum |
|
Nitrogen Fertilizer |
|
Consolidated |
|
Cash and cash equivalents |
$ |
425 |
|
$ |
65 |
|
$ |
644 |
|
$ |
375 |
|
$ |
45 |
|
$ |
581 |
|
| Total assets |
|
2,986 |
|
|
972 |
|
|
4,093 |
|
|
2,978 |
|
|
975 |
|
|
4,707 |
|
| Total debt and finance lease
obligations, including current portion (1) |
|
42 |
|
|
547 |
|
|
1,585 |
|
|
44 |
|
|
547 |
|
|
2,185 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) Corporate
total debt and finance lease obligations, including current portion
consisted of $996 million and $1,594 million at March 31, 2024 and
December 31, 2023, respectively. |
| |
Petroleum Segment
Key Operating Metrics per Total Throughput
Barrel
| |
Three Months EndedMarch 31, |
|
(in millions) |
|
2024 |
|
|
2023 |
|
| Refining margin * |
$ |
16.29 |
|
$ |
23.24 |
|
| Refining margin adjusted for
inventory valuation impacts * |
|
14.23 |
|
|
23.91 |
|
| Direct operating expenses
* |
|
5.78 |
|
|
5.90 |
|
|
|
|
|
|
|
|
|
| * See “Non-GAAP
Reconciliations” section below. |
| |
Refining Throughput and Production Data by
Refinery
| Throughput
Data |
Three Months EndedMarch 31, |
|
(in bpd) |
2024 |
|
2023 |
|
| Coffeyville |
|
|
|
|
|
Gathered crude |
62,405 |
|
45,353 |
|
|
Other domestic |
45,925 |
|
51,476 |
|
|
Canadian |
9,532 |
|
4,121 |
|
|
Condensate |
7,700 |
|
9,174 |
|
|
Other feedstocks and blendstocks |
12,569 |
|
13,236 |
|
| Wynnewood |
|
|
|
|
|
Gathered crude |
43,059 |
|
49,822 |
|
|
Other domestic |
— |
|
3,957 |
|
|
Condensate |
10,262 |
|
15,930 |
|
|
Other feedstocks and blendstocks |
4,340 |
|
3,425 |
|
|
Total throughput |
195,792 |
|
196,494 |
|
| Production
Data |
Three Months EndedMarch 31, |
|
(in bpd) |
2024 |
|
|
2023 |
|
| Coffeyville |
|
|
|
|
Gasoline |
72,723 |
|
|
64,489 |
|
|
Distillate |
56,007 |
|
|
50,160 |
|
|
Other liquid products |
4,554 |
|
|
5,112 |
|
|
Solids |
4,980 |
|
|
3,345 |
|
| Wynnewood |
|
|
|
|
Gasoline |
31,984 |
|
|
39,987 |
|
|
Distillate |
19,166 |
|
|
25,254 |
|
|
Other liquid products |
5,563 |
|
|
6,282 |
|
|
Solids |
6 |
|
|
10 |
|
|
Total production |
194,983 |
|
|
194,639 |
|
| |
|
|
|
| Light product yield (as % of
crude throughput) (1) |
100.6 |
% |
|
100.0 |
% |
| Liquid volume yield (as % of
total throughput) (2) |
97.0 |
% |
|
97.3 |
% |
| Distillate yield (as % of
crude throughput) (3) |
42.0 |
% |
|
41.9 |
% |
|
|
|
|
|
|
|
| (1) Total Gasoline
and Distillate divided by total Gathered crude, Other domestic,
Canadian, and Condensate throughput (collectively, “Total Crude
Throughput”). |
| (2) Total
Gasoline, Distillate, and Other liquid products divided by total
throughput. |
| (3) Total
Distillate divided by Total Crude Throughput. |
| |
Key Market Indicators
| |
Three Months EndedMarch 31, |
|
|
|
2024 |
|
|
|
2023 |
|
| West Texas Intermediate (WTI)
NYMEX |
$ |
76.91 |
|
|
$ |
76.02 |
|
| Crude Oil Differentials to
WTI: |
|
|
|
|
Brent |
|
4.85 |
|
|
|
6.11 |
|
|
WCS (heavy sour) |
|
(16.91 |
) |
|
|
(19.71 |
) |
|
Condensate |
|
(0.83 |
) |
|
|
0.13 |
|
|
Midland Cushing |
|
1.59 |
|
|
|
1.51 |
|
| NYMEX Crack Spreads: |
|
|
|
|
Gasoline |
|
22.55 |
|
|
|
29.80 |
|
|
Heating Oil |
|
36.87 |
|
|
|
46.93 |
|
|
NYMEX 2-1-1 Crack Spread |
|
29.71 |
|
|
|
38.37 |
|
| PADD II Group 3 Product
Basis: |
|
|
|
|
Gasoline |
|
(9.97 |
) |
|
|
(3.77 |
) |
|
Ultra-Low Sulfur Diesel |
|
(10.35 |
) |
|
|
(4.64 |
) |
| PADD II Group 3 Product Crack
Spread: |
|
|
|
|
Gasoline |
|
12.58 |
|
|
|
26.03 |
|
|
Ultra-Low Sulfur Diesel |
|
26.51 |
|
|
|
42.29 |
|
| PADD II Group 3 2-1-1 |
|
19.55 |
|
|
|
34.16 |
|
| |
|
|
|
|
|
|
|
Nitrogen Fertilizer Segment:
Ammonia Utilization Rates
(1)
| |
Three Months EndedMarch 31, |
|
(percent of capacity utilization) |
2024 |
|
|
2023 |
|
| Consolidated |
90 |
% |
|
105 |
% |
|
|
|
|
|
|
|
| (1) Reflects our
ammonia utilization rates on a consolidated basis. Utilization is
an important measure used by management to assess operational
output at each of CVR Partners’ facilities. Utilization is
calculated as actual tons produced divided by capacity. We present
our utilization for the three months ended March 31, 2024 and 2023
and take into account the impact of our current turnaround cycles
on any specific period. Additionally, we present utilization solely
on ammonia production rather than each nitrogen product as it
provides a comparative baseline against industry peers and
eliminates the disparity of plant configurations for upgrade of
ammonia into other nitrogen products. With our efforts being
primarily focused on ammonia upgrade capabilities, this measure
provides a meaningful view of how well we operate. |
| |
Sales and Production Data
| |
Three Months EndedMarch 31, |
|
|
|
2024 |
|
|
2023 |
|
| Consolidated sales volumes
(thousand tons): |
|
|
|
|
Ammonia |
|
70 |
|
|
42 |
|
|
UAN |
|
284 |
|
|
359 |
|
| |
|
|
|
| Consolidated product pricing
at gate (dollars per ton):(1) |
|
|
|
|
Ammonia |
$ |
528 |
|
$ |
888 |
|
|
UAN |
|
267 |
|
|
457 |
|
| |
|
|
|
| Consolidated production volume
(thousand tons): |
|
|
|
|
Ammonia (gross produced) (2) |
|
193 |
|
|
224 |
|
|
Ammonia (net available for sale) (2) |
|
60 |
|
|
62 |
|
|
UAN |
|
305 |
|
|
366 |
|
| |
|
|
|
| Feedstock: |
|
|
|
|
Petroleum coke used in production (thousand tons) |
|
128 |
|
|
131 |
|
|
Petroleum coke used in production (dollars per ton) |
$ |
75.71 |
|
$ |
77.24 |
|
|
Natural gas used in production (thousands of MMBtus) (3) |
|
2,148 |
|
|
2,102 |
|
|
Natural gas used in production (dollars per MMBtu) (3) |
$ |
3.10 |
|
$ |
5.76 |
|
|
Natural gas in cost of materials and other (thousands of MMBtus)
(3) |
|
1,765 |
|
|
1,315 |
|
|
Natural gas in cost of materials and other (dollars per MMBtu)
(3) |
$ |
3.49 |
|
$ |
7.79 |
|
|
|
|
|
|
|
|
|
| (1) Product
pricing at gate represents sales less freight revenue divided by
product sales volume in tons and is shown in order to provide a
pricing measure that is comparable across the fertilizer
industry. |
| (2) Gross tons
produced for ammonia represent total ammonia produced, including
ammonia produced that was upgraded into other fertilizer products.
Net tons available for sale represent ammonia available for sale
that was not upgraded into other fertilizer products. |
| (3) The feedstock
natural gas shown above does not include natural gas used for fuel.
The cost of fuel natural gas is included in direct operating
expense. |
|
|
Key Market Indicators
| |
Three Months EndedMarch 31, |
|
|
|
2024 |
|
|
2023 |
|
| Ammonia — Southern plains
(dollars per ton) |
$ |
539 |
|
$ |
739 |
|
| Ammonia — Corn belt (dollars
per ton) |
|
574 |
|
|
894 |
|
| UAN — Corn belt (dollars per
ton) |
|
277 |
|
|
373 |
|
| |
|
|
|
| Natural gas NYMEX (dollars per
MMBtu) |
$ |
2.10 |
|
$ |
2.76 |
|
| |
|
|
|
|
|
|
Q2 2024 Outlook
The table below summarizes our outlook for
certain operational statistics and financial information
for our Nitrogen Fertilizer Segment for the second quarter of
2024. See “Forward-Looking Statements” above.
| |
Q2 2024 |
| |
Low |
|
High |
| Nitrogen Fertilizer |
|
|
|
|
Ammonia utilization rates |
|
|
|
|
Consolidated |
|
95 |
% |
|
|
100 |
% |
|
Coffeyville Fertilizer Facility |
|
95 |
% |
|
|
100 |
% |
|
East Dubuque Fertilizer Facility |
|
95 |
% |
|
|
100 |
% |
|
Direct operating expenses (in millions) (1) |
$ |
50 |
|
|
$ |
55 |
|
|
Capital expenditures (in millions) (2) |
$ |
15 |
|
|
$ |
20 |
|
|
|
|
|
|
|
|
|
|
| (1) Direct
operating expenses are shown exclusive of depreciation and
amortization, turnaround expenses, and inventory valuation
impacts. |
| (2) Capital
expenditures are disclosed on an accrual basis. |
|
|
The second quarter of 2024 outlook for our
petroleum and renewables businesses is not being provided due to
the undetermined impact of a fire that commenced at the Wynnewood
Refinery during severe weather in the early morning hours of April
28, 2024, which fire was extinguished later that morning. The
Wynnewood Refinery began the process of re-starting portions of the
refinery later that evening. No employees or contractors were
injured in the incident. Operations at the Coffeyville Refinery
were not impacted by the fire. While management does not currently
expect the impacts of this incident to be material to the Company’s
overall financial position, its assessment remains in process. The
Company expects to issue an outlook for these businesses for the
second quarter of 2024 once the expected impact of the incident is
determined.
Non-GAAP Reconciliations:
Reconciliation of Net Income
to EBITDA and Adjusted EBITDA
| |
Three Months EndedMarch 31, |
|
(in millions) |
|
2024 |
|
|
|
2023 |
|
| Net
income |
$ |
90 |
|
|
$ |
259 |
|
|
Interest expense, net |
|
20 |
|
|
|
18 |
|
|
Income tax expense |
|
17 |
|
|
|
56 |
|
|
Depreciation and amortization |
|
76 |
|
|
|
68 |
|
|
EBITDA |
|
203 |
|
|
|
401 |
|
| Adjustments: |
|
|
|
|
Revaluation of RFS liability, favorable |
|
(91 |
) |
|
|
(56 |
) |
|
Unrealized loss (gain) on derivatives, net |
|
24 |
|
|
|
(31 |
) |
|
Inventory valuation impacts, (favorable) unfavorable |
|
(37 |
) |
|
|
20 |
|
|
Adjusted EBITDA |
$ |
99 |
|
|
$ |
334 |
|
|
|
Reconciliation of Basic and Diluted
Earnings per Share to Adjusted
Earnings per Share
| |
Three Months EndedMarch 31, |
|
|
|
2024 |
|
|
|
2023 |
|
| Basic and diluted
earnings per share |
$ |
0.81 |
|
|
$ |
1.94 |
|
| Adjustments: (1) |
|
|
|
|
Revaluation of RFS liability, favorable |
|
(0.67 |
) |
|
|
(0.42 |
) |
|
Unrealized loss (gain) on derivatives, net |
|
0.18 |
|
|
|
(0.23 |
) |
|
Inventory valuation impacts, (favorable) unfavorable |
|
(0.28 |
) |
|
|
0.15 |
|
|
Adjusted earnings per share |
$ |
0.04 |
|
|
$ |
1.44 |
|
|
|
|
|
|
|
|
|
|
| (1) Amounts are
shown after-tax, using the Company’s marginal tax rate, and are
presented on a per share basis using the weighted average shares
outstanding for each period. |
|
|
Reconciliation of Net Cash Provided By
Operating Activities to Free Cash
Flow
| |
Three Months EndedMarch 31, |
|
(in millions) |
|
2024 |
|
|
|
2023 |
|
| Net cash provided by
operating activities |
$ |
177 |
|
|
$ |
247 |
|
| Less: |
|
|
|
|
Capital expenditures |
|
(47 |
) |
|
|
(45 |
) |
|
Capitalized turnaround expenditures |
|
(12 |
) |
|
|
(8 |
) |
|
Return of equity method investment |
|
3 |
|
|
|
19 |
|
|
Free cash flow |
$ |
121 |
|
|
$ |
213 |
|
|
|
Reconciliation of Petroleum
Segment Net Income to EBITDA and
Adjusted EBITDA
| |
Three Months EndedMarch 31, |
|
(in millions) |
|
2024 |
|
|
|
2023 |
|
|
Petroleum net income |
$ |
127 |
|
|
$ |
259 |
|
|
Interest income, net |
|
(4 |
) |
|
|
(20 |
) |
|
Depreciation and amortization |
|
48 |
|
|
|
46 |
|
|
Petroleum EBITDA |
|
171 |
|
|
|
285 |
|
| Adjustments: |
|
|
|
|
Revaluation of RFS liability, favorable |
|
(91 |
) |
|
|
(56 |
) |
|
Unrealized loss (gain) on derivatives, net |
|
24 |
|
|
|
(31 |
) |
|
Inventory valuation impacts, (favorable) unfavorable (1) |
|
(37 |
) |
|
|
12 |
|
|
Petroleum Adjusted EBITDA |
$ |
67 |
|
|
$ |
210 |
|
|
|
Reconciliation of Petroleum Segment Gross Profit to
Refining Margin and Refining Margin Adjusted for Inventory
Valuation Impacts
| |
Three Months EndedMarch 31, |
|
(in millions) |
|
2024 |
|
|
|
2023 |
|
| Net
sales |
$ |
1,722 |
|
|
$ |
1,993 |
|
| Less: |
|
|
|
|
Cost of materials and other |
|
(1,432 |
) |
|
|
(1,582 |
) |
|
Direct operating expenses (exclusive of depreciation and
amortization) |
|
(103 |
) |
|
|
(104 |
) |
|
Depreciation and amortization |
|
(48 |
) |
|
|
(46 |
) |
|
Gross profit |
|
139 |
|
|
|
261 |
|
| Add: |
|
|
|
|
Direct operating expenses (exclusive of depreciation and
amortization) |
|
103 |
|
|
|
104 |
|
|
Depreciation and amortization |
|
48 |
|
|
|
46 |
|
|
Refining margin |
|
290 |
|
|
|
411 |
|
| Inventory valuation impacts,
(favorable) unfavorable (1) |
|
(37 |
) |
|
|
12 |
|
|
Refining margin, adjusted for inventory valuation
impacts |
$ |
253 |
|
|
$ |
423 |
|
|
|
|
|
|
|
|
|
|
| (1) The Petroleum
Segment’s basis for determining inventory value under GAAP is
First-In, First-Out (“FIFO”). Changes in crude oil prices can cause
fluctuations in the inventory valuation of crude oil, work in
process and finished goods, thereby resulting in a favorable
inventory valuation impact when crude oil prices increase and an
unfavorable inventory valuation impact when crude oil prices
decrease. The inventory valuation impact is calculated based upon
inventory values at the beginning of the accounting period and at
the end of the accounting period. In order to derive the inventory
valuation impact per total throughput barrel, we utilize the total
dollar figures for the inventory valuation impact and divide by the
number of total throughput barrels for the period. |
|
|
Reconciliation of
Petroleum Segment Total Throughput Barrels
and Metrics per Total Throughput Barrel
| |
Three Months EndedMarch 31, |
|
|
|
2024 |
|
|
2023 |
|
| Total throughput barrels per
day |
|
195,792 |
|
|
196,494 |
|
| Days in the period |
|
91 |
|
|
90 |
|
|
Total throughput barrels |
|
17,817,099 |
|
|
17,684,480 |
|
| |
|
|
|
| (in millions, except per total
throughput barrel) |
|
|
|
| Refining margin |
$ |
290 |
|
$ |
411 |
|
| Refining margin per total
throughput barrel |
$ |
16.29 |
|
$ |
23.24 |
|
| |
|
|
|
| Refining margin, adjusted for
inventory valuation impact |
$ |
253 |
|
$ |
423 |
|
| Refining margin adjusted for
inventory valuation impact per total throughput barrel |
$ |
14.23 |
|
$ |
23.91 |
|
| |
|
|
|
| Direct operating expenses
(exclusive of depreciation and amortization) |
$ |
103 |
|
$ |
104 |
|
| Direct operating expenses per
total throughput barrel |
$ |
5.78 |
|
$ |
5.90 |
|
| |
|
|
|
|
|
|
Reconciliation of Nitrogen Fertilizer
Segment Net Income to EBITDA and
Adjusted EBITDA
| |
Three Months EndedMarch 31, |
|
(in millions) |
|
2024 |
|
|
2023 |
|
| Nitrogen Fertilizer
net income |
$ |
13 |
|
$ |
102 |
|
|
Interest expense, net |
|
8 |
|
|
7 |
|
|
Depreciation and amortization |
|
19 |
|
|
15 |
|
|
Nitrogen Fertilizer EBITDA and Adjusted
EBITDA |
$ |
40 |
|
$ |
124 |
|
|
|
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